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New tax plans on the way

New tax plans on the way

Tuesday 31 January 2023

New tax plans on the way

Tuesday 31 January 2023


New revenue raising proposals are being drawn up ahead of the second stage of the Tax Review debate, with Policy and Resources admitting its goods and services tax idea is wildly unpopular.

The Committee has until 15 February to come up with an alternative set of plans after accepting that its proposed GST is unlikely to get States support.

The debate had started last week but after three days a number of amendments had been rejected.

The debate will resume in two weeks with P&R still wanting support for its wider plans that include reforming the island's social security and income tax measures.

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Pictured: Deputy Peter Ferbrache was met by anti-GST protestors as he entered the States last week.

P&R met today, for what is believed to have been the first time all five committee members were together since last week's Tax Review debate.

Top of their agenda was considering how to best proceed with the debate when it resumes on 15 February.

P&R still want its original proposals to be passed - with a spokesperson today saying: "The Committee remains of the view that its original proposals are the best way to reform the tax system in a way that is genuinely progressive, reducing the burden for those on lower incomes, while raising enough revenue to ensure public finances remain sustainable as demand on health services and pensions increases."

However, it is now apparent that P&R accept that raising revenue through a goods and services tax is unlikely to get States support.

The spokesperson said: "...the Committee has listened to the views of the community and States Members, who wish to see an alternative. It has also considered the comments made in the debate around the amendments that have already been laid and rejected so far.

"The Committee is therefore seeking to develop an alternative set of proposals that can be debated alongside the original plan, taking into account ideas put forward by other members, and replacing a GST with other revenue raising measures."

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Pictured: Deputies Peter Roffey and Peter Ferbrache have been at the forefront of campaigning FOR the Tax Review proposals.

This means that next month the States will consider the original set of proposals, an amended set of proposals from P&R and any other amendments which are lodged and accepted for debate. This includes a new version of the Fairer Alternative lodged by Deputies Heidi Soulsby and Gavin St Pier. 

With the next stage of the debate fast approaching, P&R said it will "work over the coming days to finalise the details so it can publish the alternative package as soon as possible, and no later this Wednesday next week".

States Members outside of P&R are being asked to contribute to help develop the alternative plans, with P&R saying that they are "determined to develop an alternative that comes as close as possible to achieve the objectives. It wishes to give the States the best possible choice, and to do what it can to avoid a situation where no decision is made and no solution for addressing the growing shortfall is found."

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Pictured: Deputy Peter Roffey is passionately in favour of social security reform.

P&R's original Tax Review proposals saw a goods and services tax brought in at 5% while income tax caps at the lower and upper end were changed. Social Security contributions would be subject to personal allowances akin to income tax if brought in, along with higher payments for higher earners.

Deputy Peter Ferbrache, the rest of P&R and Deputy Peter Roffey - the President for Employment and Social Security - have all passionately argued in favour of making the changes to tax and social security systems, insisting it would benefit lower paid people. They also argued that a GST would bring in much needed revenue, see higher earners pay more, while not detrimentally affecting lower paid people. 

The GST element of the proposals has been unpopular with many people including those who speak for the retail, hospitality and motoring industries.

A rally against GST was attended by thousands of people just days before the Tax Review debate started.

The tax debate resumes on Wednesday 15 February.

READ MORE...

Deputies warned against opting for "comfort blanket" of delay on tax

Case made for alternative course of action on tax

Act now on tax call from Ferbrache as States losses mount

WATCH: Highlights from the GST rally

Deputies urge P&R to drop GST plans

Thousands say 'no to GST'

"Unacceptable" and "damaging" service cuts if States reject GST

Alternative tax package promises greater States savings

Social security changes help poorer families and 'middle Guernsey'

Tax plan includes 5% GST - but P&R says most families will be better off

Why States leaders STILL think GST and tax reform is needed

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